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Reuters: DoJ Considering Criminal Charges Against Binance

The Defiant | Owen Fernau  | Dec 12, 2022

BNB price chart - Reuters:  DoJ Considering Criminal Charges Against BinanceFTX’s implosion has ratcheted up the pressure on all centralized exchanges in crypto.  The U.S. Department of Justice is reportedly considering criminal charges against Binance, the world’s largest crypto exchange.

  • Reuters reports that, while yet to be filed, charges under investigation are unlicensed money transmission, money laundering conspiracy, and criminal sanctions violations.
    • Binance’s BNB token, which secures the BNB Chain, is down 3.3% in the past day on the news.
  • Binance responded on Twitter — “Reuters has it wrong again,” the firm tweeted, while also linking to a statement from Tigram Gambaryan, a former IRS agent whom Binance hired in September 2021.
  • Outflows from the exchange:  The news coincides with significant withdrawals from the exchange — Nansen, the crypto data provider, shows a net outflow of $1.29B in the past 24 hours.

See:  Is Binance’s Proof-of-Reserves Pointless Without Liabilities?

  • PoR:  Binance contracted Mazars, an audit, tax and advisory firm, to produce a report on Binance’s reserves. The report, released on Dec. 7, found the exchange to be solvent but included multiple caveats.
  • John Reed Stark of the SEC: “Binance’s ‘proof of reserve’ report doesn’t address [the] effectiveness of internal financial controls, doesn’t express an opinion or assurance conclusion and doesn’t vouch for the numbers…This is how I define ‘red flag’,” Stark tweeted on Dec. 10.

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